Starbucks CEO Niccol Faces Investor Doubts as Sales Slide Continues

Nine months after taking the helm at Starbucks, Chief Executive Officer Brian Niccol is under growing pressure to prove he can replicate the turnarounds he engineered at Taco Bell and Chipotle. The company’s global same-store sales fell 1% in the fiscal quarter that ended 30 March, marking a fifth consecutive quarterly contraction, and foot-traffic data from Placer.ai show regular customers are visiting less often than a year ago. Investors initially cheered Niccol’s arrival—sending the stock up more than 21% on 13 August when his appointment was announced—but the shares have since lagged the broader market. Starbucks now trades at a forward price-to-earnings ratio of 33.2, richer than McDonald’s and Yum Brands, yet analysts have become more cautious; TD Cowen downgraded the stock to “hold,” and some fund managers say they are waiting for clearer evidence of a recovery. Niccol’s “Back to Starbucks” strategy focuses on restoring café seating, simplifying the menu, adding freshly baked items and accelerating staffing. Starbucks plans to boost headcount at all 11,000-plus company-owned North American stores by the end of the summer—a move Bernstein estimates will cost $1.5 billion to $2 billion over the next two years but could curb turnover and speed service. Detailed financial targets are slated for an investor day in 2026. The overhaul is meeting resistance from Starbucks Workers United, which represents employees at more than 600 locations. Unionized baristas staged walk-outs at dozens of stores in June to protest new dress-code rules and other policy changes. Former CEO Howard Schultz, however, has publicly endorsed Niccol, saying on stage in Las Vegas that he has “never been more optimistic” about the company’s direction.